Raising 4 billion yuan to join the Internet video war, Huawen Media's transformation is a bit uncertain

Huawen Media's ambition to share the Internet video cake is still "partial". In addition, Liang Zhenpeng believes that his "Internet TV project" will face greater industry risks."The current model of watching Huawen Media has not embarked on a differentiated route, and is very similar to the models created by LeTV, Xiaomi, Storm Video, and PPTV."

Lead: The report shows that Huawen Media's "Mobile Video Project" will mainly build a video cloud platform to provide high-quality video services to people in specific densely populated areas such as modern large-scale factories, schools and hospitals; the "Internet TV Project" will mainly focus on seizing the entrance to smart homes; the goal of the "Film and Television Drama Production and Procurement Project" is to enhance the connection between the company and its partners, and jointly provide support for "mobile video" and "Internet TV" to seize the entrance and retain users.

On the evening of August 30, Huawen Media (000793.SZ) released a fixed increase plan. The company plans to develop no more than 242 million shares from no more than 10 specific targets at a price of no less than 16.18 yuan/share, and raise total funds. No more than 3.9154 billion yuan will be used for mobile video projects, Internet TV projects and film and television drama production and procurement projects.

According to the plan, the mobile video project plans to invest 1.076 billion yuan, including the transfer of 38% equity of Guoguang Huaping and its capital increase (76 million yuan) and the establishment of Huawen Zhiyun and its capital increase (1 billion yuan); the Internet TV project plans to invest 1.2134 billion yuan, including the transfer of 30% equity of Global Zhida and its capital increase (1.0134 billion yuan) and capital increase from Guangdong (200 million yuan); the planned investment in film and television drama production and procurement projects is 1.626 billion yuan, including establishing a joint venture company with Youpeng Pule and increasing its capital (920 million yuan), establishing a joint venture company with Hairun Film and Television, etc. and increasing its capital (500 million yuan) and establishing a joint venture company with Dance Digital and increasing its capital (206 million yuan).

Huawen Media stated that the actual controller of the company and the companies it controls will not participate in the subscription of the shares issued this time. As of the announcement date of this plan, the company has no confirmed target for this issuance, so the relationship between the issuance target and the company cannot be determined. The transferor of the Company's transfer of the equity of the relevant project implementation entities involved in the use of the raised funds and other shareholders of each project implementation entity company, including natural person shareholders or legal person shareholders and their directors, supervisors and senior management personnel, will not participate in this Subscription of non-public offerings of shares. This seems intended to avoid possible connected transactions at the shareholder level.

Internet industry analyst Liang Zhenpeng pointed out to reporters: "Huawen Media itself is a media company with relatively complete channels. What it is doing now is the latest phenomenon in the industry. That is, the LeTV model that Internet and media companies are following suit, starting from websites and video companies, adding content, services, data, and terminals to platforms. However, this omni-channel model has not yet been successful."

Huawen Media's plan does cover multiple aspects of Internet video, investing a total of 4 billion yuan in seven projects. It does not seem huge in the context of the video industry's "burning money". After all, even leading Youku Tudou and iQiyi have not yet escaped the loss stage. However, judging from the fund-raising feasibility analysis report released by the company, Huawen Media has no intention of joining the battle for front-line video websites this time.

The report shows that the "Mobile Video Project" will mainly build a video cloud platform to provide high-quality video services to people in specific densely populated areas such as modern large factories, schools and hospitals; the "Internet TV Project" will mainly seize the entrance to smart homes; The goal of the "Film and Television Drama Production and Procurement Project" is to enhance the connection between the company and its partners, and jointly provide support for "mobile video" and "Internet TV" to seize the entrance and retain users.

Obviously, Huawen Media's ambition to share the Internet video cake is still "partial". In addition, Liang Zhenpeng believes that his "Internet TV project" will face greater industry risks. He said: "LeTV Super TV lost more than 500 million yuan in 2014. The current model of watching Huawen Media has not embarked on a differentiated route. It is very similar to the models created by LeTV, Xiaomi, Storm Video, and PPTV. Media companies are now transforming to the Internet, but how to combine their own circumstances to create a distinctive profit model is a problem for the entire industry."

Editor: vian